Almost half of the micro, small and medium enterprises (MSMEs) surveyed across India prefer UPI as their main way to handle transactions and grow their business, a new report by PayNearby has revealed. The MSME Digital Index Report found that 48% of respondents chose UPI as their most preferred payment method, followed by Aadhaar-enabled banking at 39%. Among women entrepreneurs, Aadhaar banking was even more popular, with 42% favouring the secure system that uses fingerprint or face recognition, PTI quoted the report. The survey covered 10,000 individuals and MSMEs working in retail-focused sectors such as kirana shops, mobile recharge outlets, chemist stores, customer service points (CSPs), and travel agencies. It also showed that smartphones have become the primary device for business operations, with 71% of all respondents using them. Among women business owners, this figure went up to 84%. When asked about the benefits of going digital, one-third of MSMEs said they had seen better operational efficiency. Meanwhile, over 73% of small businesses in semi-urban and rural areas reported either increased income or smoother day-to-day operations thanks to digital tools. A small but growing number, 7%, have also started using automated or AI-powered solutions such as inventory management apps, automated billing, and customer engagement platforms. Anand Kumar Bajaj, Founder, MD & CEO of PayNearby, said, “The MSME sector is the backbone of Bharat’s economy, and the rapid adoption of digital tools such as smartphones, UPI, Aadhaar-enabled banking, and emerging AI workflows is proof that this segment is embracing modernisation.” PayNearby is a DPIIT-certified firm that offers branchless banking and digital services across the country.